WASHINGTON, DC – Sen. James Inhofe (R-Okla.), Ranking Member of the Environment & Public Works Committee, today introduced legislation to provide technical corrections to the Clean Air Act’s Renewable Fuels Standard (RFS) as mandated by the Energy Independence and Security Act of 2007. Senator Inhofe’s bill recognizes the delicate political balance surrounding the RFS and provides simple fixes that are intended to provide flexibility for the fuels industry in meeting these mandates.

“My bill is a measured response to the overly aggressive bio-fuels increase mandated by the Energy Independence and Security Act of 2007 passed in December. The energy bill’s mandates allow no room for error in a fuels industry already constrained by tight supplies, full capacity, environmental regulation, and volatile market conditions.

“This technical corrections bill is not an effort to substantively overhaul the RFS program but rather is an attempt to smooth its unintended consequences. Recognizing the delicate political balance surrounding RFS, these simple fixes are intended to provide flexibility for the fuels industry in meeting these mandates.

“As Ranking Member on the Environment and Public Works Committee I did not support the 2007 energy bill. The enactment of these technical corrections would not change my overall opposition to the current flaws enacted to the RFS program, but my bill does make this new RFS less onerous.”

BACKGROUND:

The EPW Committee has principle jurisdiction over motor fuels policy including renewable fuels. Senator Inhofe, as chairman of the Senate Environment and Public Works Committee in 2005, worked successfully with his colleagues to create a comprehensive program to promote the use of renewable fuels in the United States in an achievable, measured and economic manner. The Reliable Fuels Act was ultimately incorporated into the Energy Policy Act of 2005 (EPACT). Further, theEPW Committee has held at least 13 hearings on the RFS program, most recently an oversighthearing in September 2006 which highlighted the implementation of this new federal RFS program.

Floor Statement by Senator Inhofe Introducing the Technical Corrections to the Clean Air Act’s Renewable Fuels Standard February 14, 2008

Today I rise to introduce the Technical Corrections to the Clean Air Act’s Renewable Fuels Standard. This bill is a measured response to the overly aggressive bio-fuels increase mandated by the Energy Independence and Security Act of 2007 passed in December. The energy bill’s mandates allow no room for error in a fuels industry already constrained by tight supplies, full capacity, environmental regulation, and volatile market conditions. This technical corrections bill is not an effort to substantively overhaul the RFS program but rather is an attempt to smooth its unintended consequences. Recognizing the delicate political balance surrounding RFS, these simple fixes are intended to provide flexibility for the fuels industry in meeting these mandates. As Ranking Member on the Environment and Public Works Committee I did not support the 2007 energy bill. The enactment of these technical corrections would not change my overall opposition to the current flaws enacted to the RFS program, but my bill does make this new RFS less onerous.

The first correction to the Clean Air Act’s Renewable Fuels Standard allows a carryover of ethanol credits. This improvement does nothing to change the currently mandated numbers. Rather, it provides flexibility to an industry facing many uncertainties. In 2007, the industry used approximately 2 billion gallons of ethanol over and above the necessary levels prescribed in the Energy Policy Act of 2005 (EPACT). However, EPACT language and EPA rulemaking do not allow for two year consecutive “carryover” of credits. This means that although the industry has exceeded the 2007 requirements, they would be unable to apply these credits after 12 months. My bill would accommodate the uncertain levels of production from year to year. Considering the myriad variables involved in the ethanol production process including crop yields, land use, and feed stock prices, it only makes sense to allow more flexibility.

Another fix extends the small refinery exemption by two years. This language also does nothing to change mandated levels. A small refinery produces less than 75,000 barrels average daily aggregate and EPACT exempts these facilities from the renewable fuels numbers until 2011. These refineries are dealing with drastically smaller economies of scale in production. In order to protect these refineries from potential economic hardship and subsequent job loss, this exemption should be extended from the year 2011 to 2013.

I am hopeful that my colleagues in the Senate will join me and quickly pass the bill I am introducing today.